By Jonathan Davies
Tesco has announced plans to close 43 unprofitable stores and scrap the opening of 49 new "very large" stores as it announced improved sales figures for the final quarter of 2014, rounding off a massively difficult year for the supermarket.
Tesco ended 2014 with a 2.9% fall in like-for-like sales, but sales over the Christmas period were more positive with a fall of just 0.3%.
The results for the final quarter are huge improvement on the previous quarter. Like-for-like sales were down 5.4% in the third quarter, compared with last year.
Tesco chief executive Dave Lewis said the supermarket giant was "seeing the benefits of listening to our customers".
Tesco also made a series of announcements; it will close 43 'unprofitable' stores in the UK, cut prices on hundreds of products, sell its Blinkbox and broadband businesses to TalkTalk and it is consulting on scrapping its defined benefits pension scheme.
Dave Lewis said the 43 stores closed will be smaller, convenience stores. The company hasn't said how many jobs will be cut, but admitted that overheads will be reduced by around 30%.
Mr Lewis also said that plans for 49 new stores across the country would be scrapped, because the supermarket chain "simply can't afford" them.
Also among the announcements made was the news that Tesco will not pay a shareholder dividend in 2014/15. Payouts had already been cut dramatically during 2014.
Tesco's operations in the UK will also get a new boss. Halfords chief executive Matt Davies will swap tyres for trolleys to become Tesco's UK managing director. He's been in charge of Halfords for two-and-a-half years and has widely been credited with its turnaround.
The supermarket chain will also move its headquarters from Cheshunt to Welwyn Garden City over the next year.
The various announcements sent Tesco shares up nearly 6% in early trading, making it the best performing company on the FTSE100.
Halfords share price opened 5.2% lower on the news that chief executive Matt Davies was leaving to join Tesco, making it the worst performing on the FTSE250.
John Ibbotson, director of the retail consultants, Retail Vision, described the result as the "beginning of the Tesco fightback".
He said: "Finally, we are witnessing the beginning of the Tesco fightback. Tesco needed a completely new direction to thrive in the brave new world of retail and hang onto its market share. It now has one.
"Previous management lacked the bottle to do what needed to be done. Lewis, it would seem, has bottle aplenty. He has taken some tough decisions. The next step is to communicate this robust plan clearly, to staff and shareholders alike, and then to implement it – rigorously and ruthlessly."
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